A federal appeals court in New Orleans is set to decide whether a Chinese drywall manufacturer can be held accountable for its product in U.S. courts after homeowners say the building material was defective.

The outcome of the Virginia-focused has "strong implications" for other property owners' damage claims against the company, including Louisiana residents, said lawyer Russ Herman, who represents plaintiffs in the massive drywall litigation.

As many as 20,000 property owners in Louisiana, Florida, Alabama, Mississippi, Texas and Virginia installed the sulfur-emitting product during frenzied building after hurricanes Katrina and Rita and a nation-wide housing boom.

A lawyer representing Taishan, Joe Cyr, said Wednesday that the manufacturer sold the product to Norfolk, Va.-based Venture Supply, which then made the decision to distribute itin Virginia. There is no evidence that Taishan targeted Virginia or knew it would be sold there, he argued.

The business contract required that any disputes be settled through arbitration under Chinese law, he said.

"Our client is not saying we don't want to be accountable," Cyr said.

Two of the judges noted during the hearing that Taishan stamped the drywall with the name and phone number of the Virginia-based distributor -- a fact that plaintiffs' lawyers also pointed to.

The legal question in the case focuses on whether Taishan "purposefully directed" its product to Virginia when putting the drywall into commerce.

Judge Catharina Haynes asked whether any sale of goods by a foreign company to the United States can be structured in a way that the foreign company avoids U.S. jurisdiction.

"It's a legitimate question and we have to think about it," Haynes said.

Haynes said it appears the company looked to make money in Virginia yet avoid accountability.

Herman said depending on what the judges specifically say in their opinion, the ruling could have a big impact on the future of cases involving a New Orleans-based distributor that bought and sold drywall in Louisiana.

U.S. District Judge Eldon Fallon in New Orleans is overseeing more than 10,000 claims in consolidated litigation involving drywall made in China.